Understand the Functioning of a Ticker Tape

Ticker Tape:What Is It And How To Read It?

A ticker tape has a long and enriched history dating back to the nineteenth century. Providing investors with knowledge about the trades and prices is crucial, helping them make informed decisions. A ticker tape is a printed paper ribbon that provides traders with numeric data and stock symbols.

Published on 11 July 2023

As financial markets and the number of listed companies in the stock economy grew, the need for electronic ticker tape systems emerged. With time, crucial data, such as the company’s name and number of traded shares, are displayed digitally in real-time. With the evolution of ticker tape, investors can keep track of stock-related information and make timely investment decisions.

Now, let us delve into the meaning and reading of a ticker tape so that you may not have difficulty beginning your trading journey.

History of Ticker Tape

The history of the ticker tape stock dates back to the late nineteenth century. In 1867, the first telegraphic ticker tape was created by Edward Calahan. Later, in 1871, Thomas Edison improved and patented it. The original system consisted of specialized keyboards that helped cover stock-related data into Morse code. The machine then read it on the other end.

With time, there have been many updates and improvements of ticker tape machines, with the emergence of new investors. Unlike the original system, revised versions were more efficient and faster. However, there was a 15-20 minutes delay between the transaction and recording times.

 To overcome this, many brokers who traded at New York Stock Exchange (NYSE) kept offices near it to provide the latest transaction figure of stocks with the least delay. It was not until 1996 a real-time electronic ticker tape was launched. This helped bridge the time gap between the transaction and recording time. Now, you can see these up-to-the-minute transaction figures, namely price & volume, on TV news channels, websites, and financial wires.

Ticker Tape: Overview

If you have a question, ‘What is ticker tape?’, you are in the right place. You may have seen a continuous display of stock prices in movies, financial news channels, or stock exchanges. The ribbon displaying a continuous and real-time price movement in individual stocks is known as a ticker tape. It is globally accepted in the securities market. It linearly disseminates price quotes and offers relevant market information to investors.

You may note that ticker tape stock is electronic in today's era. Like a computer, an electronic device is used to transmit stock-related information to investors globally. Every time a stock is bought and sold, it is displayed on the electronic ticker tape. It records current or live trading activity on a stock exchange.

How to Read Ticker Tape?

Reading a ticker tape precisely is crucial to make informed decisions. Before trading in stocks, you must check the company’s name, the value of stock prices on the previous day, and much more. You may not know how to read a ticker tape as a beginner. No worries, as it is not as difficult as you expected. You can glance at the below-mentioned points to read and understand a ticker tape thoroughly in chronological order. 

  • Ticker Symbol: It is the combination of unique characters to identify the company’s stock
  • Shared Traded: It is the number or volume of shares being reported. You may see common abbreviations such as:-

K= 1,000

M= 1 million

B= 1 billion

  • Price of Shares: It refers to the price per share for each trade or the last bid price
  • Visual Cue or Change Direction: Usually, a triangle is displayed on the screen. It depicts whether the stock trades lower or higher than the previous day’s closing price.
  • Change Amount or Delta: It is the difference between the current and the previous day’s closing price
  • Color-Coded: Different colours are used to donate the increase or decrease of the trading price compared to the closing price.

Green Color- Used if the trading price is more than the closing price of the previous day

Red Color- Used when the trading price is less than the closing price of the previous day

Blue Color- Used if the trading price is the same as the closing price of the previous day

  • Decimals: Trading prices are mostly displayed in decimals

Quote Priority

It is important to note that the order in which stocks are priced appears on the ticker tape matters as there is limited space, and the information is provided sequentially. Since there are millions of trades going on in thousands of stocks each day, you may not know which data gets included and when.

Generally, most active stocks prioritize data on the ticker tape. The volume of shares is considered while determining the priority for the display of prices. Other contributing factors that lead to active trading include the largest price change movements, widely held stocks, large price movers, and stocks with headlines in the news.

Wrapping Up!

A ticker tape linearly represents stock-related information, like the trading price. Technological advancements have helped you know the current trading price of different stocks without any time gap. Use it as an opportunity to trade in stocks rationally and make huge sums of money.

Read a ticker tape stock carefully so that you can make informed decisions. Invest in a trade wisely and earn huge profits.


Chandresh Khona
Team Espresso

We care that you succeed

Bringing readers the latest happenings from the world of Trading and Investments specifically and Finance in general.